Producing Employment Promotion Services in a Municipality : Economic Benefits and Possible Forms of Enterprise. Case Vihti.

Abstract

The cost of the unemployment in municipalities increased in 2015. This was due the fact that in 2015 the labor market subsidy, which is paid to an unemployed resident of a municipality, system changed. KELA still pays for the first 300 days, but since 2015 the cost of the days after is shared between the municipality and KELA, so that the municipality is responsible for 50 % of the cost. For this reason, the Local Government in the municipality of Vihti decided to establish a Recycling Centre in May 2015. The aim was to reduce the costs of the labor market subsidy by employing long-term unemployed residents.

The results of the case research show that the municipality of Vihti is gaining an economic benefit from the employment with pay subsidy. The results also indicate that in the future the employment promotion services is benefiting the municipality as a part of social enterprise if there is a need to incorporate the functions.